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Consequences of Performance Improvement Plans

By Tim Tolan

When you ask a member of your team to sign a performance improvement plan (PIP) you are essentially telegraphing to them that their performance is not meeting the standards you’ve set for that role. While some employees may view this as a plan to help them get back on track, most will simply view this as a preview of what’s about to happen to their employment status. The outcome is usually not very good.

It really depends on how you, the CIO, present and package this performance plan to the employee you are hoping to turn around. If done properly you can really help an underperforming team member improve—and in some rare cases become a superstar. Conversely, if presented incorrectly, it sends a loud and clear message that you are simply crossing your “T’s” and dotting your “I’s” and documenting their poor performance. In some cases the PIP is required because the leader has failed to document performance issues previously, and the PIP is simply a last ditch paper trail required by the HR or legal team to initiate a termination.

Let’s look at the employee viewpoint for a moment. When an employee signs a PIP, he or she may think you are there to help them get things back on track when in reality you are asking the employee to agree that you’ve actually identified them as a non-performer. During the one-on-one meeting, many times a manager/leader simply wants to get the document signed. Just check the box so you have proof that the employee read it, not necessarily that he/she agrees to the details of the document. I’ve been there many times in my former life as an executive and it’s an awkward and uncomfortable meeting at best.

Occasionally, I get phone calls from candidates or people who know I run a search firm asking for my advice. I usually tell them that it’s a bad idea to sign a PIP unless the terms are favorable to the employee.

Net-Net: If the PIP gives the employee a specific timeline that is reasonable (okay—enough time to find another job) it may be reason enough to sign the PIP. On the other hand if the PIP is fraught with a bunch of legal mumbo-jumbo and you are uncomfortable, you should take pause. You have a few options at this point.

You could verbally agree to perform the duties requested in the document and to make positive changes but refuse to sign the PIP.

You could lawyer-up and indicate that you simply can’t sign the PIP without consulting with your attorney (that usually ends the meeting).

If you are forced to sign the PIP, or threatened with termination, then you could sign it, but include the words “under duress” next to your signature. What this means is that, since you were threatened with termination, you were not free to decline the PIP, and therefore your signature is meaningless.

Whether you sign the PIP or not, you are probably going to be terminated anyway, unless you get another job before the sand runs out of the hourglass. Not signing it doesn’t make it impossible for them to fire you—just a bit more difficult. It also makes your remaining time with that organization less than comfy.

So why is it harmful to sign it? First, you want and need time. The longer you have to look for a new job while being employed with the old employer, the better. Depending on your role it could take months for you to land a new job. Second, you want to get your severance if you don’t find a job in time and do get fired. Severance should never be your end game, but it’s far better for your career, your family, and for you if you get another job first—so you bridge your income without dipping into your savings or retirement account while you are looking for your next gig.

If you are ever in this career predicament make sure you take pause and understand your options and their intent.